Ionic Insights: The Business Jet Fleet in India (November 2023)

This edition of Ionic Insights focuses on the business jet fleet in India. It has been a time-consuming and complexed edition to produce!

We analyse the size, composition and age of the installed fleet, whilst simultaneously investigating the most numerous OEMs and base locations.

Background

With a population exceeding 1.4 billion India is now considered to be the world's most populous country.

The country’s economy is also ranked fifth largest in the world with the biggest industry being retail, which makes up nearly twenty-five percent of the nation’s GDP. Whilst traditional industries such as agriculture and mining are still hugely significant, the IT industry continues to surge and now generates over $200 billion in annual revenue.

It is the international nature of many of these industries and a burgeoning UHNW class that is driving demand for business aviation.

Analysis

India boasts a substantial installed business jet fleet of 148* aircraft (*Source: AMSTAT, November ‘23), forty percent of which is based in the New Delhi area.

Midsize and Super-midsize aircraft dominate and together represent four out of every ten aircraft, with legacy Hawker-Beechcraft and Cessna-Textron aircraft each making up approximately 18% of the fleet.

Bombardier (including Learjet) is the largest OEM by fleet size with roughly 28% of the installed fleet. The ultra-long range Global (all variants) is particularly popular.

Overall, the average age of the fleet is a comparatively young 15 years, with 96% percent of said fleet being registered domestically (VT-).

Opportunities for Financing

To date the financing of business aircraft within India has largely been the preserve of the private banks. However, this is beginning to change and the market is increasingly attracting the attention of international asset-based financiers.

Challenges do still remain, though.

Unlike the finance and leasing of commercial airliners, ensuring the involvement of a third-party manager/operator under tripartite management agreement remains crucial; but perhaps the most significant concern is that whilst India ratified the Cape Town Convention in 2008 it is still to pass it in to law.

Consequently many lenders and lessors, who had their fingers burned as a result of the collapse of Kingfisher Airlines (and others) over a decade ago, were last year frustrated by the granting of bankruptcy protection to budget airline GoFirst, where they again found that they were prevented from recovering their assets in a timely and efficient manner.

See the following slide for a detailed breakdown of the fleet:

Source: AMSTAT, November 2023.